The aim of this study was to isolate antagonistic bacteria from the soil of seven different locations of Tibet. We tested with plate confrontation method the inhibitory activities of these bacteria against rice blast (Magnaporthe grisea) and obtained a strain of antagonistic bacterium named YN01. We also tested the physio-biochemical characteristics and molecular identification, and screened the best condition of growth and fermentation. We determined the IAA secretion ability with Salkowski colorimentric, and qualitatively detected the siderophores and spore inhibition effect with chromazurol S plate. Result based on physio-biochemical characteristics and molecular identification showed YN01 as Bacillus atrophaeus. The inhibition rate of rice blast mycelia exceeded 90%. Its best carbon source and nitrogen source were sucrose and yeast powder. The isolate could not grow normally when pH < 6. The best temperature was 30-35 °C. The best condition of inhibition effect included sucrose, glutamate, pH = 8, and the best temperature region of 30-35 °C. YN01 had secretion abilities of IAA and siderophores. Contrasted with negative control, bacterial suspension and fermentation broth inhibited spore germination significantly. Through nutrition and spatial competition and produced metabolites, YN01 led to slacken spore of rice blast fungal germination, aberrant morphology in mycelia, and disrupted mycelia physiological activity. In summary, for its powerful bacteriostatic activity YN01 is a potential antagonistic bacteria source in the future.